Nearly half of those thinking about moving over the next three years are planning to downsize, new research has revealed.
According to Lloyds Bank, downsizing is the most popular reason for moving, with 46% of those questioned looking to buy a smaller property when they take their next step.
The popularity of downsizing has grown in recent years, buoyed by the anticipated returns.
The research revealed that by downsizing to a semi-detached property UK homeowners on average would have made £117,230 in 2015.
Meanwhile, those planning to move from a detached properly to a bungalow could have raised an average of £99,223.
Homeowners in the South West of England and East Anglia saw the highest percentage increases over the past 10 years.
In the South West, the average downsizing windfall for homeowners moving from a detached property to a bungalow went up 27% to £91,663 in 2015, while there was a 26% increase in East Anglia in the same period to £19,240.
Homeowners moving from a detached to a semi would have received a windfall of £130,654 in the South West last year, up 19% from 2005. Those living in East Anglia would have seen a rise of 16% to £101,878.
London homeowners could make the most from downsizing as they stand to free up an average of £201,052 from trading down from a detached to a semi.
The main reason people cite for downsizing is to move somewhere which better served their circumstances (53%). Other reasons include reducing bills or freeing up equity (both 39%), or to provide extra cash for retirement (31%).
Mike Songer, mortgage director at Lloyds Bank, said: “People may consider moving home for a variety of reasons, often tied to their next big step in life – whether that’s getting married, starting a family or children growing up and flying the nest.
“We typically think of people moving to bigger houses as they move up the housing ladder, but people are increasingly looking to downsize their home because their circumstances or priorities have changed. Whilst financial gain may not be the main driver for those looking to trade down their property it is clearly a factor, with three quarters of downsizers expecting to profit from such a move.
“There are definitely financial benefits to be gained from trading down, with an average potential windfall of £117,230 when moving from a detached home to a semi-detached house. Downsizing is also healthy for the market, as it helps keep it moving and frees up larger properties which could be perfect for young families about to take their next step up the property ladder.”
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